5/10/2002 @ 12:00PM

The Transformers

While there is no objective way to quantify the most successful business acquisition in recent memory, some would be clear winners in anyone’s mind. The purchase of Manhattan for about $24 stands out as being a particularly shrewd deal. After all, that’s about what a martini will set you back in most New York City hotels nowadays.

Throughout this week, we present ten transforming deals. These are the deals that helped define the companies that made them and in some cases transformed whole industries. That’s not to say all of them were runaway hits. They weren’t. Transforming doesn’t always mean successful.

Each day, we’ll profile one of what we view as the top five deals that have had a significant impact on companies, counting down to number one by week’s end.

PE Hires Craig Venter

In 1998 an obscure maker of scientific gear,
PE
(now called
Applera
), hired maverick scientist
Craig
Venter
Craig Venter
to run a gene-mapping spinoff,
Celera Genomics
. Under Venter, Celera used Applera-built gene sequencers to mine genetic data that will eventually revolutionize medicine. Venter was ousted as Celera started inventing drugs based on his gene research, but his DNA map opens a galaxy of possibilities for Applera–and human health.

KKR Buys RJR Nabisco

In 1988, after a protracted battle, leveraged buyout kingpin
Henry
Kravis
Henry Kravis
laid out an unprecedented sum–nearly $30 billion–for
RJR Nabisco
, hoping to cash in by privatizing and reorganizing the company. But the gains never came and the deal effectively shut the door on big LBOs. Kravis exited at a loss in 1995 and RJR Nabisco was later sold off in pieces. All that remains is the $6.5 billion domestic tobacco company.

Yankees Buy Babe Ruth

For Boston Red Sox fans, Dec. 26, 1919, is a day that will live in infamy. That’s the day cash-strapped team owner
Harry Harrison
Frazee
Harry Harrison Frazee
sold
Babe
Ruth
Babe Ruth
, the game’s best player, to the New York Yankees for $100,000. That set in motion an odd chain of events. The Sox, who had won two championships with Ruth, haven’t won a World Series since, creating a rivalry–OK, hatred–between the fans and the teams, which are the two most valuable in baseball.

AOL Buys Time Warner

In January 2000, new-economy company
AOL
announced what was then a $160 billion acquisition–courtesy of its fake market valuation–of old-economy company
Time Warner
. That move set in motion something that has become the Holy Grail of advertising, the cross-sell. AOL, until then nothing but an Internet service provider, at the time touted synergies such as selling Time Warner digital content to its massive subscriber base. It hasn’t worked out that way. AOL took a first-quarter writeoff of $54 billion to reflect the loss in value of the combined company. But the acquisition did change AOL and the entire media industry.

Citicorp Merges With Travelers

Before
Citicorp
merged with
Travelers
to form
Citigroup
in 1998, there was no such thing as a financial services “supermarket.” Congress was on its way to repealing a depression-era law that made offering full-service banking, lending and insurance products illegal. But Citicorp jumped the gun–and breaking the law, as it were, paid off. Citigroup’s success has cast a long shadow over smaller firms trying to compete.